🏗️

Economic Systems

Command, free market, and mixed economies — who decides what to produce?

📊 Year 9 💰 Microeconomics ⭐ ★★

Economic Systems: Who Decides?

Every society must answer the same three questions: What to produce? How to produce it? For whom? Different economic systems answer these questions in radically different ways — with profound consequences for efficiency, equality, innovation, and freedom.

🍽️ The Restaurant Analogy: A free market restaurant lets customers choose freely from a menu — popular dishes stay, unpopular ones disappear. A command economy is a fixed-menu canteen — a planner decides what everyone eats. Most real economies are like modern restaurants: mostly free choice, but health and safety regulations, calorie labels, and minimum wage laws ensure the market works more fairly.

System	Who Decides?	Advantages	Disadvantages
Free Market	Price mechanism (supply/demand)	Efficiency, innovation, consumer choice	Inequality, market failure, no public goods
Command/Planned	Central government	Can ensure basics for all, no unemployment	Inefficiency, shortages, lack of innovation
Mixed (real world)	Both market and government	Combines efficiency with social safety net	Government failure possible alongside market failure

← Back to Year 9 📊 Economics Tools →

📊 Interactive Economic Diagram

Market Event

💡 How to read economic diagrams: Always label axes (Price on Y-axis, Quantity on X-axis for most diagrams). Shifts represent changes in non-price factors; movements along a curve represent price changes. Equilibrium is where curves intersect.

📊 PED Calculator

Original Quantity New Quantity Original Price (£) New Price (£)

Enter values above and click Calculate.

💡 Exam Tip: Show all working in economics calculations. Use the correct formula, substitute values clearly, state units, and interpret your result in economic terms.